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RH Gears to Report Q2 Earnings: Here's What Investors Must Know
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Key Takeaways
RH's Q2 EPS estimate is $3.19, up 88.8% year over year, while revenues are seen rising 9.1% to $905.5M.
Investments in new products and European demand are expected to fuel top-line growth this quarter for RH.
Margin expansion is projected, with operating margin at 15-16% and EBITDA margin at 20.5-21.5%.
RH (RH - Free Report) , formerly Restoration Hardware, is scheduled to report its second-quarter fiscal 2025 (ended Aug. 2) results on Sept. 11, after market close.
In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 244.4% while the net revenues missed the same by 0.5%, respectively. Year over year, the metrics grew 132.5% and 12%, respectively.
RH reported better-than-expected earnings in two of the last four quarters and missed on the remaining two occasions, the average surprise being 57.6%.
How are RH’s Estimates Placed?
For the fiscal second quarter, the Zacks Consensus Estimate for earnings per share (EPS) has moved down to $3.19 from $3.29 in the past seven days. However, the newly estimated figure indicates an increase of 88.8% from $1.69 per share reported in the year-ago quarter.
The consensus mark for net revenues is pegged at $905.5 million, indicating growth of 9.1% from the year-ago figure of $829.7 million.
Factors That are Expected to Have Impacted RH’s Q2 Performance
RH’s top line is expected to have increased year over year in the fiscal second quarter because of the benefits realized from the investments made to elevate and expand its product offerings and platform. Moreover, favorable market demand trends in the Furniture & Home Furnishing business space are expected to have catalyzed the growth in the to-be-reported quarter. Additionally, the demand patterns and gains from the international market, particularly in Europe, are expected to have provided an additional revenue stream, thereby boosting its top-line growth.
For the fiscal second quarter, RH expects revenues to grow year over year by 8-10%.
Also, RH’s strategy to digitally reimagine the brand and business model is likely to have been boding well. Going forward, the company expects to make significant investments to enhance and differentiate its online experience, with plans to upgrade its website throughout 2025.
On the bottom-line front, RH’s earnings and margins are expected to have improved in the fiscal second quarter due to its ongoing efforts in shifting its sourcing out of China. To minimize the adverse impacts caused by the new tariff regime and inflationary pressures, this strategic resourcing effort is expected to have increased margins alongside enhanced top-line leverage.
For the quarter to be reported, RH expects the adjusted operating margin to be between 15% and 16%, up from 11.7% reported in the year-ago quarter. Its expectations for adjusted EBITDA margin in the range of 20.5-21.5% also reflect year-over-year growth from 17.2%.
What the Zacks Model Says for RH
Our proven model does predict an earnings beat for RH this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
RH’s Earnings ESP: The company has an Earnings ESP of +2.51%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Williams-Sonoma Inc. (WSM - Free Report) reported results for the second-quarter fiscal 2025 (ended Aug. 3), with earnings and net revenues beating the Zacks Consensus Estimate and increasing year over year.
The quarter’s performance was driven by positive comps in both furniture and non-furniture, and strong performance in its retail and ecommerce channels. With a strong omnichannel platform and infrastructure, going forward, Williams-Sonoma expects to beat its expectations and multiply growth across its brands, despite macro challenges. Williams-Sonoma now projects fiscal 2025 annual net revenues in the range of +0.5% to +3.5% (from -1.5% to +1.5%), with comparable brand revenue growth now expected to be between +2.0% and +5.0% (from flat to +3.0%).
Lowe’s Companies, Inc. (LOW - Free Report) posted second-quarter fiscal 2025 results with year-over-year growth in both the top and bottom lines. While revenues came in just shy of the Zacks Consensus Estimate, earnings surpassed the same.
The Mooresville, NC-based home improvement retailer returned to positive comparable sales during the quarter, with a 1.1% increase in comparable sales as both Pro and DIY customers contributed despite a challenging start to the quarter from the weather. Management of Lowe’s also updated its full-year outlook following the completion of the Artisan Design Group (“ADG”) acquisition. Total sales are now projected between $84.5 billion and $85.5 billion, up from the prior range of $83.5-$84.5 billion.
The Home Depot Inc. (HD - Free Report) has reported second-quarter fiscal 2025 results, wherein both the sales and earnings missed the Zacks Consensus Estimate. However, both metrics improved year over year. Also, comparable sales increased year over year.
Home Depot is confident about its initiatives to strengthen the business. Management highlighted continued momentum in smaller home-improvement projects and reiterated its focus on building the best interconnected experience for customers and growing share, while reaffirming fiscal 2025 guidance. Home Depot anticipates sales to increase 2.8% year over year, with adjusted earnings per share expected to fall 2%.
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RH Gears to Report Q2 Earnings: Here's What Investors Must Know
Key Takeaways
RH (RH - Free Report) , formerly Restoration Hardware, is scheduled to report its second-quarter fiscal 2025 (ended Aug. 2) results on Sept. 11, after market close.
In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 244.4% while the net revenues missed the same by 0.5%, respectively. Year over year, the metrics grew 132.5% and 12%, respectively.
RH reported better-than-expected earnings in two of the last four quarters and missed on the remaining two occasions, the average surprise being 57.6%.
How are RH’s Estimates Placed?
For the fiscal second quarter, the Zacks Consensus Estimate for earnings per share (EPS) has moved down to $3.19 from $3.29 in the past seven days. However, the newly estimated figure indicates an increase of 88.8% from $1.69 per share reported in the year-ago quarter.
RH Price and EPS Surprise
RH price-eps-surprise | RH Quote
The consensus mark for net revenues is pegged at $905.5 million, indicating growth of 9.1% from the year-ago figure of $829.7 million.
Factors That are Expected to Have Impacted RH’s Q2 Performance
RH’s top line is expected to have increased year over year in the fiscal second quarter because of the benefits realized from the investments made to elevate and expand its product offerings and platform. Moreover, favorable market demand trends in the Furniture & Home Furnishing business space are expected to have catalyzed the growth in the to-be-reported quarter. Additionally, the demand patterns and gains from the international market, particularly in Europe, are expected to have provided an additional revenue stream, thereby boosting its top-line growth.
For the fiscal second quarter, RH expects revenues to grow year over year by 8-10%.
Also, RH’s strategy to digitally reimagine the brand and business model is likely to have been boding well. Going forward, the company expects to make significant investments to enhance and differentiate its online experience, with plans to upgrade its website throughout 2025.
On the bottom-line front, RH’s earnings and margins are expected to have improved in the fiscal second quarter due to its ongoing efforts in shifting its sourcing out of China. To minimize the adverse impacts caused by the new tariff regime and inflationary pressures, this strategic resourcing effort is expected to have increased margins alongside enhanced top-line leverage.
For the quarter to be reported, RH expects the adjusted operating margin to be between 15% and 16%, up from 11.7% reported in the year-ago quarter. Its expectations for adjusted EBITDA margin in the range of 20.5-21.5% also reflect year-over-year growth from 17.2%.
What the Zacks Model Says for RH
Our proven model does predict an earnings beat for RH this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
RH’s Earnings ESP: The company has an Earnings ESP of +2.51%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
RH’s Zacks Rank: It currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Releases
Williams-Sonoma Inc. (WSM - Free Report) reported results for the second-quarter fiscal 2025 (ended Aug. 3), with earnings and net revenues beating the Zacks Consensus Estimate and increasing year over year.
The quarter’s performance was driven by positive comps in both furniture and non-furniture, and strong performance in its retail and ecommerce channels. With a strong omnichannel platform and infrastructure, going forward, Williams-Sonoma expects to beat its expectations and multiply growth across its brands, despite macro challenges. Williams-Sonoma now projects fiscal 2025 annual net revenues in the range of +0.5% to +3.5% (from -1.5% to +1.5%), with comparable brand revenue growth now expected to be between +2.0% and +5.0% (from flat to +3.0%).
Lowe’s Companies, Inc. (LOW - Free Report) posted second-quarter fiscal 2025 results with year-over-year growth in both the top and bottom lines. While revenues came in just shy of the Zacks Consensus Estimate, earnings surpassed the same.
The Mooresville, NC-based home improvement retailer returned to positive comparable sales during the quarter, with a 1.1% increase in comparable sales as both Pro and DIY customers contributed despite a challenging start to the quarter from the weather. Management of Lowe’s also updated its full-year outlook following the completion of the Artisan Design Group (“ADG”) acquisition. Total sales are now projected between $84.5 billion and $85.5 billion, up from the prior range of $83.5-$84.5 billion.
The Home Depot Inc. (HD - Free Report) has reported second-quarter fiscal 2025 results, wherein both the sales and earnings missed the Zacks Consensus Estimate. However, both metrics improved year over year. Also, comparable sales increased year over year.
Home Depot is confident about its initiatives to strengthen the business. Management highlighted continued momentum in smaller home-improvement projects and reiterated its focus on building the best interconnected experience for customers and growing share, while reaffirming fiscal 2025 guidance. Home Depot anticipates sales to increase 2.8% year over year, with adjusted earnings per share expected to fall 2%.